Personal Finance: Budget Quiz

What is a budget?

• A list of things you want to buy

• A spending plan outlining income, expenses, and financial goals

• A loan from the bank

• A savings account

What is the main purpose of a budget?

• To increase debt

• To help take control of money and achieve financial goals

• To spend as much as possible

• To avoid tracking expenses

Which of the following is NOT a reason why budgeting is important?

• Helps you understand your relationship with money

• Ensures you never spend money

• Helps save for the future

• Reduces financial stress

What is the first step in creating a budget?

• Spending all your income

• Ignoring expenses

• Outlining your income

• Taking out a loan

Which of the following is an example of a fixed expense?

• Groceries

• Rent

• Eating at a restaurant

• Buying clothes

What is an example of a variable expense?

• Mortgage payments

• Grocery Bills

• Utility bills

• Insurance premiums

What is one of the first decisions to make when buying a car?

• What type of fuel the car uses

• What type of car best fits your needs

• Which dealership has the best deals

• How quickly you can pay off the loan

What percentage of annual income do people typically spend on their transportation budget?

• 0-2%

• 5-7%

• 14-16%

• 30-32%

Which of the following is NOT typically included in the total cost of owning a car?

• Monthly car payments

• Gas expenses

• Grocery expenses

• Insurance payments

Why is it important to set aside extra money in your car budget?

• To upgrade to a luxury car in the future

• To cover unexpected expenses like gas price hikes or repairs

• To save money for a vacation

• To pay off the loan faster